DAILY NEWS Apr 21, 2022 3:01 PM - 2 comments

CRTC Denies Licence to Glassbox's AUX TV

TEXT SIZE bigger text smaller text

The Commission received an application by Glassbox Television Inc. for a broadcasting licence to provide AUX TV, a national, French-language Category 2 specialty programming undertaking that would offer programming devoted to emerging music and its creation including programming intended to help emerging artists.
The applicant also requested the authorization, by condition of licence, to allow the service to be made available for distribution in high definition  format until the end of the licence term, consistent with the Commission's approach to HD specialty services. 

Glassbox is a Canadian corporation whose principal shareholders are Andrea Pyman and Jeffrey Elliott. They own 40% and 35% of the voting shares respectively. The remaining issued common shares are held by Canadian shareholders (15%) and non-Canadian shareholders (10%). Glassbox is controlled by its board of directors, consistent with the terms of the Security Holders' Agreement.
The Commission received an intervention in opposition to the application from MusiquePlus Inc. expressing concern that the proposed service could be directly competitive with its service and with existing Category 1 or analog pay or specialty services, particularly those serving a smaller French-language market. The intervention and the applicant's reply can be found on the Commission's website at www.crtc.gc.ca under "Public Proceedings."
After examining the application, the intervention and the applicant's reply, the Commission considers that the primary issue arising from this application is whether the proposed service would be directly competitive with existing Category 1 or analog pay or specialty services and in particular with the French-language analog specialty service known as MusiquePlus.   Would AUX TV be directly competitive with existing Category 1 or analog pay or specialty services and in particular with MusiquePlus?
The Commission has implemented a competitive, open-entry approach to licensing Category 2 services. Nevertheless, it does seek to ensure that Category 2 services do not compete directly with any existing Category 1 or analog pay or specialty television services. In Public Notice 2022-171, the Commission adopted a case-by-case approach in determining whether a proposed Category 2 service should be considered directly competitive with an existing Category 1 or analog pay or specialty service. The Commission examines each application in detail, taking into consideration the proposed nature of service and the unique circumstances of the genre in question.

In the present case, the Commission considers that the applicant proposed a very broad nature of service definition that would allow considerable flexibility in the type of programming that could be broadcast and that does not clearly define how the proposed programming would be complementary to that offered by existing Category 1 or analog pay or specialty services such as MusiquePlus.
The Commission further notes that Glassbox requested to draw its programming from most of the categories set out in item 6 of Schedule I to the Specialty Services Regulations, 1990. The Commission also notes that the applicant proposed safe-guards, such as limiting the broadcast of programming drawn from certain categories to a percentage of all programming, to ensure that the programming would not be directly competitive with existing Category 1 or analog pay or specialty services.
The Commission finds that given the definition of the nature of service submitted by the applicant, the proposed service could be competitive with existing Category 1 or analog pay or specialty services and specifically with MusiquePlus. Moreover, the Commission is not convinced that the safeguards presented in the application are sufficient to eliminate this risk.

The Commission recognizes that a proposal to offer an outlet for French-language emerging artists would surely have a positive impact in the current market conditions. However, given that the applicant failed to demonstrate that its proposed service would not be directly competitive with existing Category 1 or analog pay or specialty services, the Commission denies the application by Glassbox Television Inc. for a broadcasting licence to operate the national, French-language Category 2 specialty television programming undertaking to be known as AUX TV.

 Dissenting opinion of Commissioner Michel Morin
The majority decision of my fellow commissioners to deny GlassBox Television Inc. (GlassBOX) the setting up of a national, French-language service dedicated to emerging music is to me both surprising and deeply disappointing, as it will have the effect of putting young Francophone artists in this country at a disadvantage relative to emerging Anglophone artists. Without the French-language stage proposed by GlassBOX, emerging Francophone artists will have no other choice but to subscribe to and appear on the other AUX TV, GlassBOX's English-language Category 2 specialty service dedicated to emerging music. The Commission's overly cautious decision, rooted in its concern over the competition Groupe Astral would face, fails to mention that neither of the specialty services MusiquePlus and MusiMax in Quebec - both owned by Groupe Astral - is dedicated to emerging music.

MusiquePlus broke new ground in North America in the 1980s and 1990s with its bold support for emerging music. Although not created until 1986, that is, after MTV in the United States (1981) and MuchMusic in Toronto (1984), MusiquePlus (a literal translation of MuchMusic) quickly took off soon after the launch of its Toronto studios and became the most innovative service the continent had ever seen.

An entire generation of Quebec youth - Francophones and Anglophones alike - became fans of MusiquePlus, which began operations at the corner of Saint-Laurent and Hôtel-de-ville and then in 1997 moved to the corner of Sainte-Catherine and Bleury, one of the busiest spots in the Quebec metropolis. The first French-language specialty service quickly struck a chord with its huge windows opening onto Sainte-Catherine Street and its camera operators moving about with their equipment hoisted on their shoulders, leaving us "old fogies" in an utter daze.

Without question, young viewers and fans of emerging music got their money's worth from MusiquePlus's first 15 years on the air. It was all about young people talking to young people. Advertising revenues were high compared with those of other specialty services, which relied more on the subscription rates set by the Commission: 10 cents a month, which at the time was nine times less than the Canadian Broadcasting Corporation's French-language service RDI. Videos by emerging artists found a home in no time. MusiquePlus had become a spark. How many young Francophone artists who had spent years knocking on doors to no avail shot to the top after appearing on MusiquePlus? How many Éric Lapointes? Daniel Bélangers? Jean Leloups? Kevin Parents? More often than not, MusiquePlus was the preferred springboard for emerging artists.

There is nothing like that today among French-language Category 1 and Category 2 specialty services. No one is stepping up to be the prime French-language showcase for emerging artists and singers.

 MusiquePlus was different. Maybe because of the language gap, or maybe because of something else, it felt less "Americanized" and more open to disparate musical tastes. I got to hear music from Quebec, from the rest of Canada, and the United States, all of which was delivered with more flair and enthusiasm than was found on MuchMusic.

Though I am now perhaps beyond the age where one watches musical stations religiously, I do occasionally turn to both MuchMusic and MusiquePlus. As far as I am concerned MuchMusic is at best an MTV clone with little or nothing uniquely Canadian about it. MusiquePlus is marginally better, but it too seems to have been sucked into following a format more interested in "Youth Culture" than music.

A generation later, remote-controlled cameras have now replaced nimble camera operators on Sainte-Catherine Street. Opaque drapes now cover MusiquePlus's windows. That says it all. Rather than open itself up to its audience, MusiquePlus no longer wants its audience to look in on it. The company has let go dozens and dozens of employees. Could it be that the owner is eyeing profits like those of its other services? That may be so, since MusiquePlus was profitable when it focused on emerging music. Still, employees may have been sacrificed, but the audience has not been fooled. Profits that were once reasonable - albeit lower than those of other Groupe Astral channels - are now plummeting. In an interview given last year to the Journal de Montréal, Mr. Luc Doyon, principal vice-president and director of MusiquePlus and Musimax, stated that MusiquePlus currently holds a mere 1.3% share of the 18- to 34-year-old youth market, down from 2% barely three years ago. Having slashed its fixed costs, the company says it is looking for a new role, a new audience, but its market shares are becoming smaller and smaller, and it never mentions emerging music. If you need proof, simply go to the website. No, emerging music is not part of MusiquePlus's business plan. It is as plain as the nose on your face. More than half of the videos are shown after midnight, when there are almost no viewers.

MusiquePlus was more than just emerging music - it was also a school. It had everything young people wanted, and while they may not have had the same disposable income as viewers 25 years of age and older, they were open to new things. Proximity and interactivity - words very much in vogue these days - were already part of MusiquePlus's arsenal back then. It was before the days of Twitter and Facebook, when we were using telephones and fax machines, and the station was literally buzzing. By 1995, MusiquePlus had its own website. In two decades, more than 800 employees passed through the doors: from Christian Bernerche, one of Montréal's top camera operators, to artistic director and producer Jean Lamoureux and veteran on-air hosts Véronique Cloutier and Marie Plourde - just some of today's top artists who learned the ropes at MusiquePlus, a school immersed in emerging music. Five years ago, the channel celebrated its 18th anniversary with a gala event at the Bell Centre; the evening's line-up included Corneille, Louis-José Houde, Avril Lavigne and Denis Drolet, just to name a few.

In 2022, Groupe Astral, which had acquired 50% of the service when it took over Radiomutuel in 1999, became the sole proprietor of MusiquePlus.
And now, MusiquePlus has been on the decline for several years. It is trying to find itself. Why? No one really knows. Is it because Groupe Astral is trying to get the same return it does on its other channels? Last fall, MusiquePlus announced that it was shifting back to music and away from reality television, but not a word was said about emerging music in any of the media coverage. Today, MusiquePlus is in the mainstream; emerging music is not even on its radar.

 At the outset, it should be stated that, at this non-appearing hearing, Groupe Astral did not demonstrate that it would provide a specialty service for emerging music. For me, this seems to be an implicit prerequisite prior to engaging in a public war against the arrival of a new channel. The Commission's alarm bells should have gone off, but instead, it seemed to be more concerned over GlassBOX potentially competing with other music channels than it was over the need to offer a service targeting starving young artists trying to break into the market. In other words, it is not because a channel airs videos in the middle of the night that it can claim to promote emerging music!

Second, GlassBOX did not talk about emerging music in vague and imprecise terms. The company stuck to very precise definitions and guidelines, the likes of which had never been seen before, to determine what emerging music means. It was an unprecedented initiative for a specialty service that the Commission should have given its nod to instead of leaving it to hover in doubt as it does in this decision.

Meanwhile, for the past decade, Groupe Astral - far from wanting to get back to its emerging music roots - has been relentless in its efforts to build up its musical audience. Less than six months ago, in October 2022, MusiquePlus asked the Commission to add new programming categories to the list from which it is authorized to draw its programming. Young people would say, "Any more mainstream than that, you're toast."
Emerging music videos, which, by condition of licence in paragraph 3, must account for 50% of MusiquePlus's weekly programming, are currently broadcast over a very short period during the night, from 12:30 a.m. to 9:00 a.m. on weekdays and from 1:00 a.m. to 8:00 a.m. on weekends.

MusiquePlus's programming includes original or translated reality television shows that have little or nothing to do with emerging music. Programs like Accorde ton look, Artiste du mois and Rock'n'Road, which could be used to showcase emerging music, account for at most 2% of MusiquePlus's total programming.

If we use the definition proposed by GlassBOX, emerging music represents less than 10% of MusiquePlus's programming content. From a regulatory standpoint, this means that AUX TV would not compete directly with Groupe Astral's Category 1 service. No one has shown or proven otherwise, including this decision, which does not refer anywhere to this 10% threshold. In the interest of consumers and emerging artists, it's understandable that I find it hard to support the panel's decision, I, who since my appointment in August 2022, have written no less than nine dissenting opinions (ten including this one). There is a key word that has always guided me when I have had to turn my mind to an issue: competition. This is true and can be verified for each of my dissenting opinions, whether it be that for Kelowna, for Sherbrooke, for Montréal or for Ottawa. These dissenting opinions can be found in the following decisions:

The implications and advisability of implementing a compensation regime for the value of local television signals: A report prepared pursuant to section 15 of the Broadcasting Act, 23 March 2022

Reconsideration of Broadcasting Decision 2022-222 pursuant to Orders in Council P.C. 2022-1769 and P.C. 2022-1770, Broadcasting Decision CRTC 2022-481, 11 August 2022

Video-on-demand service, Broadcasting Decision CRTC 2022-366, 23 December 2022

Regulatory frameworks for broadcasting distribution undertakings and discretionary programming services - Regulatory policy, Broadcasting Public Notice CRTC 2022-100, 30 October 2022

Licensing of new radio stations to serve Ottawa and Gatineau, Broadcasting Decision CRTC 2022-222, 26 August 2022, corrected by Licensing of new radio stations to serve Ottawa and Gatineau - Correction, Broadcasting Decision CRTC 2022-222-1, 28 August 2022

Change in the effective control of TQS inc. and licence renewals of the television programming undertakings CFJP-TV Montréal, CFJP-DT Montréal, CFAP-TV Québec, CFKM-TV Trois-Rivières, CFKS-TV Sherbrooke, CFRS-TV Saguenay and of the TQS network, Broadcasting Decision CRTC 2022-129, 26 June 2022

CRTC Report to the Minister of Canadian Heritage on the Canadian Television Fund (Appendix 2), announced in CRTC submits report on the Canadian Television Fund, news release, 5 June 2022

Licensing of new radio stations to serve Kelowna, British Columbia, Broadcasting Decision CRTC 2022-62, 14 March 2022

CIGR-FM Sherbrooke - Acquisition of assets, Broadcasting Decision CRTC 2022-435, 24 December 2022

 Not only could AUX TV's programming have been made subject to the Commission's existing guidelines, and not only could the Commission have approved a new definition of emerging artist within the service's conditions of licence, but GlassBOX also offered additional guarantees that would have limited its programming and further protected Groupe Astral's service.

Let us look at those guidelines. In order for an artist to be considered an emerging artist, either six months must have elapsed since sales of one of the artist's recordings attained gold record status according to Soundscan or 48 months must have elapsed since the commercial release of the artist's first album. These are the first two guidelines that can be used to give new life to an emerging artist who has not achieved commercial success.
As I just stated, GlassBOX went beyond that. The company proposed to differentiate between non-educational and educational emerging music programming.

Regarding non-educational programming, artists would not be eligible to participate in AUX TV if they were in the Top 40 charts used by the Commission in the 12 months preceding the date on which the program aired. This is quite a restriction for determining who can be considered an emerging artist! As for educational emerging music programming, in AUX TV - Category 2 specialty service, Broadcasting Decision CRTC 2022-121, 6 March 2022, it is defined as "informal or formal educational programming aimed at assisting musicians or potential musicians in their careers or musicianship."
A poorly motivated decision

The Commission has already granted a licence to Clovys Communications Inc. (now known as Clovys TV inc.), a French-language entertainment channel that offers programming covering hit music (urban music [hip-hop, rap, rhythm and blues, soul and reggae], world music [ziyjm raum soca, calypso, compa, bossa nova], Latin music [reggaeton, merengue, salsa, bachata] and Black culture), programming that is far more similar to that of MusiquePlus than to that of AUX TV. In 2022, MusiquePlus and Astral Television Networks opposed Clovys's application. What reason could there be for this double standard? How could opposition from a general interest channel like MusiquePlus sway the Commission in one case but not in the other? How could the panel make such a decision? It completely escapes me.

Broadcasting Decision 2022-121 puts the Commission in a somewhat paradoxical and, in my view, untenable situation of having approved, for the English-language market, a service similar to the one it is denying the French-language market with AUX TV, a Category 2 service that incidentally would have had the same name in both markets.

What more did it want in terms of definitions, safeguards and benchmarks? The Commission, which did not approve the licence application, refuses to say, and in the circumstances, this strikes me as a total aberration. How can the Commission ask for "more" when it is unable to say what "more" is? Unfortunately, the Commission is not being very transparent if it wants to encourage other broadcasters to offer that type of service to Francophones under the age of 24, who are still without a Category 2 platform for emerging music.

The Commission writes, "given the definition of the nature of service submitted by the applicant, the proposed service could be competitive with existing Category 1 or analog pay or specialty services and specifically with MusiquePlus. Moreover, the Commission is not convinced that the safeguards presented in the application are sufficient to eliminate this risk." My response to this is that the Commission's role is not to eliminate competition in order to protect a service. Is ours a market economy or a state-controlled economy? This is no longer the 1970s, when the Commission worked to establish a regulatory framework designed to protect a budding industry. We are in the second decade of the 21st century. No, thank you. Bring on competition as far as I am concerned!

The desire to protect a service subject to more restrictive regulatory obligations does not jibe with the "risk of competition" to which the Commission refers. Now that Canada's broadcasting system has matured, let competition drive it!

Remember that all the Commission said in the past is that it was willing to deal with these applications on a case-by-case basis, with at least two conditions: (a) that the Category 1 service protected by the Commission through its conditions of licence provide its own proof of the threat it faces - which was not done in this instance; and (b) that the Category 2 service be respectful of Category 1 services - which in this instance was demonstrated by the guidelines proposed by GlassBOX, not to mention those already put in place by the Commission. The Commission never said that it wanted to eliminate the "risk of competition." The choice of those words signals a change in course, which in my view tarnishes the will of the Commission in its newly expanded version.

To ensure that GlassBOX keeps its word, the Commission could have - and this would have been perfectly normal in my opinion - imposed as a condition of licence the multiple definitions of emerging artist. This would have largely protected the
service offered by Groupe Astral from competition stemming from AUX TV's expanding into other musical formats.

Regarding the decision by the Commission, which "is not convinced that the safeguards presented in the application are sufficient to eliminate this risk," could the Commission be more transparent and respectful of the industry? What additional safeguards is it talking about? Can it define them? Can it list them so that GlassBOX or any another party can at some point offer the service to our teenagers? This strikes me as essential to the transparency and well-being of the Canadian broadcasting system, which currently offers Francophones virtually nothing in the way of emerging music.
When all is said and done, the AUX TV service proposed by GlassBOX would not have been a promotional vehicle for big stars or a means of strengthening Quebec's star system. It would have been an alternative channel featuring panel discussions on the challenges faced by emerging musicians, as well as interviews by established musicians with unknown musicians who might never achieve real commercial success. That is what GlassBOX and its AUX TV emerging music specialty service had to offer.

The only defence MusiquePlus put forward to demonstrate its commitment to emerging music was that it once broadcast 35 videos by known artists. For me, this argument is not particularly convincing given the channel's current programming and its general interest approach to young viewers.

Appended to this dissenting opinion is a list of 32 MusiquePlus programs. The programs shown on a white background could ultimately, in my view, deal with issues related to emerging music. Notice that I say "ultimately." That does not mean that, in actual practice, these programs contain emerging music. The shaded programs, on the other hand, are in my opinion squarely on the fringe of emerging music; they are programs to which none of GlassBOX's programs could have given umbrage, because they have absolutely nothing to do with emerging music. You be the judge. A brief description is provided for each of the programs that would or would not have faced competition from GlassBOX.

The French-language descriptions of these 32 programs, translated here into English, are taken verbatim from MusiquePlus's website. Nothing has been added or removed. The findings are lethal: the term "emerging artist" appears only once, and this, in the first of the 32 descriptions! Again, to decide for yourself, refer to the appendix to this dissenting opinion. You will find in the descriptions nary a word about emerging music. What more evidence is needed?

MusiquePlus's history aside, this illustration seems to me quite convincing and could no doubt be confirmed by young people, who were the real fans of MusiquePlus several years ago and who are still looking for an emerging music specialty service.
In writing that it "is not convinced that the safeguards presented in the application are sufficient to eliminate this risk," the Commission sins not once, but twice. Not only does it not propose an alternate definition of emerging music programming, but it refers to a "risk" that it fails to prove in its two-and-a-quarter page decision. The Commission is not being transparent to an applicant who wants to offer a new service, a preferred showcase for emerging artists.

As I noted earlier, the decline of MusiquePlus (which moved away from its original mandate for which a Category 1 licence was issued) has been confirmed over the past few years. Is it the Commission's mission to protect companies looking for a new audience and new musical content that, moreover, has nothing to do with emerging music?

The majority of the panel should also be reminded that, in recent years, the Commission has wisely adopted an approach that favours the proliferation of Category 2 services in order to meet the increasingly diverse needs of consumers. As competition opens up in categories like news and sports, it is more than high time to adopt the same attitude with respect to specialty music services, which can certainly hold a candle to those other categories in terms of diversity. Finally, with regard to Groupe Astral's argument that the Quebec market lacks the capacity to welcome a new music service, it bears reiterating that capacity has no regulatory basis.

Finally, it is interesting to note that even though there are two protected French-language services and three protected English-language services, none devotes a minimum of 10% of its programming to emerging music. Yet MusiquePlus is the only one of these protected services that challenged this conclusion. Was there not an important determination to be made regarding the essence of Groupe Astral's objections? Should the Commission not have exercised its duty to question the validity of the arguments put forward by MusiquePlus, which was crying wolf?

When MusiquePlus's licence was last renewed in 2022 the Commission itself made the following observation:
The licensee stated that MusiquePlus has become the preferred cultural channel for youth and young adults, who tune to its service not only for its musical content, but also for news of events occurring within Quebec's cultural landscape and for information about performances and various other matters that concern young people. In addition, since MusiquePlus supports a number of social causes that are not directly related to music, but are nonetheless of interest to youth, such as the homeless and young offenders, the licensee proposed that the description of its nature of service specify that 90% of the programming must have a connection to music-related programs.

At that time, the Executive Secretary of MusiquePlus stated, during the hearing, that MusiquePlus's mandate was much broader than that of MuchMusic. GlassBOX, meanwhile, planned to increase its Canadian content gradually from 15% in Year 1 to 25% in Year 2 and to 35% in subsequent years. Here was a Category 2 specialty service making a substantial offer for domestic emerging music! After many years on the air, both MusiquePlus and Musimax continue to provide, by condition of licence, 60% Canadian content.
AUX TV is already there for the English-language audience. The Commission had much more than theoretical arguments to consider. In order to make its decision, all it had to do was watch the English-language version of AUX TV on Rogers (channel 107) in Ottawa.
Anglophones already have other Category 2 services that air music videos, such as Much Vibe, Ultimate Indies and MuchMoreRetro. The Commission had already determined that those English-language music video services did not compete with existing Category 1 services.

This makes me wonder what bee got into the bonnets of the majority of the panel to make them reach a decision diametrically at odds with the decision they made on the English-language side, if it was not the more limited capacity of the French-language market.
I am the first to acknowledge that fact, and I have referred to it many times in the past. The Quebec market, with its 6 million Francophones, is comparable in size to San Francisco. In other words, it is a very small market in North American terms.
Unfortunately for the service offered by Groupe Astral, market capacity has no regulatory or legal basis for factoring in the risk of competition to which the Commission refers in its decision.

The Commission ought to have considered nothing but the proposed nature of service. In its decision, it is still very vague on the conditions that might at some point be brought about in order to protect MusiquePlus, assuming that the service, owing to its current programming, has to be protected from a service dedicated to emerging music. I believe the majority of the panel is very much in the wrong for not being more transparent in its intentions. In reality, it discourages other broadcasters from proposing to the Commission a programming service devoted to emerging music, something Francophones, unlike Anglophones, currently do not have.

For all these reasons, I would have approved the application by GlassBOX Television Inc. for a broadcasting licence to operate a national, French-language Category 2 specialty television service that would be devoted to emerging artists and that would have been known as AUX TV.


Horizontal ruler